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NASDAQ: TGEN1
Benjamin Locke, Co-CEO
Rodman & Renshaw:
17th Annual Global Investment Conference
September 9, 2015
2
Safe Harbor Statement
This presentation included forward-looking statementswithin the meaning of Section 27-A of the Securities Act of1933, and Section 21-E of the Securities Exchange Act of1934. Such statements include declarations regarding theintent, belief, or current expectations of the Company and itsmanagement. Prospective investors are cautioned that anysuch forward looking statements are not guarantees offuture performance, and involve a number of risks anduncertainties that can materially and adversely affect actualresults as identified from time to time in the Company‘s SECfilings. Forward looking statements provided herein as of aspecified date are not hereby reaffirmed or updated.
3
Pioneering Emissions
Technology
Robert Panora, President & COO
Ultra Emissions Technology Video:
(click here for Video)
4
TecogenRevolutionizing Distributed Generation
5
Other Build/Sell/Service Business
Gas Driven Chillers
Gas Driven Heat Pumps (Ilios)
Ultra Emission Retrofit Kits
Turnkey Installation Services
Tecogen Core Business
Build, Sell, Install, and Service
Advanced, Modular Combined Heat
and Power (CHP) Systems
Proprietary Technology
Industry Leader
Tecogen CHP
System
Heat, Power and Cooling that is Cheaper, Cleaner, and More Reliable
The Company
66
2000 2014Jan 2002 2004 2006 2008 2010 2012
Thermo Sale of TECOGENto private investor group
First (and only) engine-driven CHP module to obtain full California Electric Rule 21 certification
CEC awards TGEN Research Contract for development of new MicrogridCHP Module
Spin Out of American DG Energy
First inverter-based CHP module to obtain CE markfor European Union (EU)
TGEN IPO
InVerde Launched
IliosDynamics Created
Ultra Emissions Technology Introduced
Key Stats
Headquartered in Massachusetts
Nine service centers
2000+ units shipped
Revenue: $19.3 M (2014)
Market OpportunityDramatic Improvements in DG Technology
7
Unique Benefits
Driven by High electric,
low gas prices
Dramatic, long-term
savings
Differentiated
technology
Financial Strengths
Excellent margins
Increasing revenues
Contracted Service
backlog
Substantial scalability
Market Resurgence
Significant growth in
large markets (NY, CA)
Historic market barriers
eliminated
Business model
unaffected by recent
changes in energy
prices
Stringent emission
standards require Ultra
Low Emission System
Tecogen deliver strong
ROI to Diverse Market
Applications
Proprietary technology
backed by domestic &
international patents
Growth Strategy
Expansion in
Existing Markets
Possess strong technical advantages
Markets largely untapped
Superior value proposition
Expansion of Turnkey
Service Centers
Leverage experience to capture more revenue
Become sole source for energy companies
Bolster direct sales effort
Ilios Platform
Commercialization
Specialized marketing team
Primary focus will be areas with high fuel cost
Leverage Emissions
Innovation
Develop retrofit business in California
Expand regionally; partnered with gas utilities
Partner with engine suppliers
Acquisition Possibilities
Construction company to improve turnkey operations
Heat pump manufacturer to accelerate Ilios markets
Catalyst company to accelerate emissions projects
Combined Heat & Power
Fundamentals
9
CHP relocates power
generation to onsite− Waste heat purposefully used
− Efficiency increased two fold (90%)
over utility power
− Energy costs sharply reduced
High electric rates, low gas
rates drive CHP, Chiller
savings − Electric rates are primary driver
− Gas rates secondary
Demand reduction contributes
to savings− Punitive demand charges during
peak use
− Several demand charges layer
together
Appeal has broadened− Carbon mitigation, grid relief,
backup power, etc.
Heat
Electricity
Natural
Gas
Patented
Emissions
I
n
v
e
r
t
e
r
Patented
Generator
Patented
Inverter
Other CHP Drivers
Resiliance to Grid Failure− Aging grid infrastructure
− Congested sub-stations
− Storm, natural disaster vulnerability
− Terrorism concerns
CHP Better suited for urban
environments Wind, Solar not practical
Fuel cells cost prohibitive
Environmental Benefits Reduces Carbon footprint by 50%
Ultra low criteria emissions (CO, NOx)
on par with Fuel Cell
Modular Installation Easier to locate
Sequential capacity as needed
Ultra-low Emission Kits
Electricity & Heat
CHP Modules TECOCHILL Water Chillers
Cooling & Heat
Ilios Water Heaters
2-3x Heat Efficiency
Product Suite
11
Competitive Positioning
CHP TECOCHILL Chillers Ilios Heating Systems
Competition• Capstone,
regional players
• York / Caterpillar
(new)
• Gas absorption
• No direct
comparables
• Conventional
heaters
Strengths• IP, cost, efficiency,
emissions,
microgrid
• IP, cost, efficiency,
emissions
• IP, efficiency,
emissions
Key Markets
• Strict emissions
regulation
• Interconnection
barriers for
conventional
systems
• Vulnerable grid
• High electric rates
• Similar to InVerde
• High demand
charges• High fuel prices
12
Sales and Marketing
13
Sales Network
8 FT Direct Sales (MA, CA, FL, NY, CT)
Manufacturer Representatives
30 Reps in 26 states/ 11 countries
Commision based
Sales Agents
10 Independent project developers
Commision based
Energy Service Companies (ESCOs)
Large project developers
Key relationships with large ESCOs (e.g.
JCI, Honeywell, Siemens, Ameresco)
Supported by company employed
applications and support engineers
Sales include contracts (68%)
Service centers provide turnkey services
Senior
Homes
13%Industrial
15%
Hospitals
14%Schools
17%
Other
15%
Office Buildings
13%
Multi-Unit
Residential 12%
Patented Advanced
Ultra-Clean Emissions System
14
Criteria Pollutant Emissions by Source
Ultra-Clean Emissions is an option on all Tecogenproducts.
Retrofit kit installed at water district pumping station.
Opportunity - all gas water pumping in Southern California
Retrofit kit functioning on a standby generator for a large Southern California customer.
Opportunity – demand response and load shaving.
Compliant with New California Emissions
Growth Opportunity –
Ultra Emission System
15
Features
Patent Protected
Third party verification
Long-term tests
Proven in a larger industrial
engine (Caterpillar)
Expanded to natural gas
generators
Shipments to NY, NJ, CA
>15M natural gas vehicles
worldwide*
Ultra Retrofit System
Tecogen CHP, Chillers, Ilios Systems √ (2012)
Stationary Engines √ (2014)
Natural Gas Generators √ (2015)
Small industrial mobile engines ant. 2016
Large industrial mobile engines tbd
Natural gas vehicle fleets tbd
*U.S. Dept. of Energy: Energy Efficiency & Renewable Energy – Alternative Fuels Data Center – Estimate as of YE2014 8/25/2015
Financial MetricsRevenues, Margins, Growth
Three revenue streams
− Product sales
− Long-term service contracts
provide stable ongoing revenue
base
− Turnkey Installation through
Tecogen service operations
Low cost basis of products
− Excellent margins for products and
service
− Lean Manufacturing Platform
Total project revenue
− Multiple of base product sale
− Engineering services and
assurance on correct installation
Tecogen Revenue & MarginsRevenue Contributions
Consistent Gross Product Margin
35-40%16
Consistent Financial Trends
17
40%
45%
50%
55%
60%
65%
70%
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
Goal
2015Q4
Goal
Operating Expense as a % of RevenueTrailing 4 Quarters (%)
$-
$2
$4
$6
$8
$10
$12
$14
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15
Backlog of Product and Installation Services$ Millions
$-
$5
$10
$15
$20
$25
$30
2013 Q3 2014 Q1 2014 Q3 2015 Q1 2015 Q3Goal
2015 Q4Goal
RevenuesTrailing 4 Quarters - in Millions
Products Services
2Q 2015 Summary
• Total Revenues $6.38M - up 41% vs. 2Q 2014
• Gross Profit $2.14M – up 59% vs. 2Q 2014
• Gross Margin 33.5% - up 13% vs. 2Q 2014
• Meeting gross margin goals in both Products and
Maintenance Services
• 66% growth in Product revenues vs. 2Q 2014
• Quarter End Backlog of $10.8 MM
18
Backlog by End Market
19
OtherAthletic Club
Office Building
Industrial
Education
Health Care
Correctional Facility
Hospitality
Multi-unit Residential
Financial Outlook
• Targeting stable Book-
to-Bill ratio of 1-1.5x
• Ongoing expense
improvement from lean
manufacturing
initiatives
• Gross Margins 35-40%
• Quarterly Backlog
>$10M
20
Future Even More PromisingConfluence of Factors
21
Natural Gas
Abundant
supply
Low cost
Preferred
fuel/low
carbon
content
Vulnerability
of Electric
Power Grid
Exposed by
natural
disasters
Prolonged/
widespread
Outage
security highly
valued
Favorable
Regulatory
Environment
Emissions in
mainstream
discussion
Impact on
policy is
significant
Clean Power
Plan’s 2030
CO2 & NOx
targets
Alternative and
Renewables
Marginal
effectiveness
Uneffected
by reduced
energy
prices
Savings
based on the
Spark
Spread
In summary: Tecogen in Prime Position for Rapid Growth
Q & ANASDAQ: TGEN
22
Appendix
• Management Bios
• Analyst Coverage
• Contacts
23
Management Team
24
John Hatsopoulos,Co-Chief Executive Officer & Board Member
CEO since the company‘s organization in 2000
Co-Founder of Thermo Electron Corp., which is now Fisher
Scientific (NYSE:TMO)
As Thermo Electron CFO, grew company from a market
capitalization of ~$100 million in 1980 to over $2.5
billion
Benjamin Locke,Co-Chief Executive Officer
Co-CEO since 2014, joined the company as General
Manager in June of 2013.
Prior to Tecogen, served as Director of Business
Development and Governmental Affairs at Metabolix from
2001. Served as Vice President of Research at Innovative
Imaging Systems prior to Metabolix.
Robert Panora,Chief Operating Officer & President
COO and President since the Company‘s organization in
2000; COO of Ilios, subsidiary of Tecogen, since inception
in 2009
General Manager of Tecogen’s Product Group since 1990
and Manager of Product Development, Engineering
Manager, and Operations Manager of the Company since
1984
David Garrison,Chief Financial Officer, Secretary & Treasurer
Chief Financial Officer since 2014.
Over 20 years of manufacturing experience in the role of
CFO. Both public and private companies from a variety of
industries including medical device, defense and
consumer products.
Board of Directors
25
Angelina Galiteva,Chairperson of the Board
Chairperson of the Company since
2005
Founder and Chair of the Board for the
Renewables 100 Policy Institute, a
non-profit entity dedicated to the
global advancement of renewable
energy solutions since 2008
Chairperson at the World Council for
Renewable Energy and Board member
of the Governors of the California ISO.
John Hatsopoulos,Co-Chief Executive Officer, Director
CEO since the Company‘s organization
in 2000
Co-Founder for Thermo Electron Corp.,
what is now Thermo Fisher Scientific
(NYSE: TMO)
As Thermo Electron CFO, grew
company from a market capitalization
of ~$100 million in 1980 to over $2.5
billion
Earl Lewis,Director
Board member since 2014
Chairman of Harvard Bioscience
Trustee of Clarkson University
History of managing companies
through large growth cycles into
successful organizations
Charles Maxwell,Director, Chair of Audit Committee
Company Board Member since 2001
40 years of energy sector specific
experience with major oil companies
and investment banking firms
Former Senior Energy Analyst with
Weeden & Co.
Board member of the publicly traded
companies Daleco Resources Corp.,
Lescarden Inc., and Chairman of
American DG Energy, Inc.
Joseph Aoun,Director
Company Board Member since 2011
Incumbent President of Northeastern
University
Recognized leader in higher education
policy; serves on the Board of
Directors of the American Council on
Education, Boston Private Industry
Council, Boston World Partnerships,
Jobs for Mass, and the New England
Council
Ahmed Ghoniem,Director
Company Board Member since 2008
Ronald C. Crane Professor of
Mechanical Engineering at MIT
Director of the Center for 21st Century
Energy and Head of Energy Science
and Engineering at MIT
Associate Fellow of the American
Institute of Aeronautics and
Astronautics
Analyst Coverage
JinMing Liu, PhD, CFA
Ardour Capital
BUY $7 target
212 946 6830
26
Contact Information
27
Company Information
Tecogen Inc.
45 First Avenue
Waltham, MA 02451
www.tecogen.com
Contact
John Hatsopoulos, Co-CEO
781.622.1122
Ariel Babcock CFA, Director of Investor Relations
781.466.6413